The Chinese government’s declaration that crypto-transactions are illegal fueled a sell-off of Bitcoin, Ethereum, and other digital assets. This, however, came as no surprise to anyone. As expected, headlines such as “this is a huge opportunity for the United States” have circulated.
Katie Haun, a venture capitalist, supports the idea. In an interview with CNBC, Haun stated that the United States should look to China for guidance on what not to do in terms of crypto-regulations. According to Haun, while China’s actions have had a negative impact on the crypto-market, they have laid the groundwork for the US to act.
Haun, an a16z partner, stated,
“This is an opportunity for the United States because, in my opinion, we should be doing the exact opposite of what China is doing in this realm.”
China took steps earlier this year to launch its own digital currency, the digital Yuan. It intends to replace a portion of the cash in circulation. The People’s Bank of China will, of course, control the digital currency. Quite the opposite of the entire ‘decentralized’ crypto-assets scenario.
According to Haun, China will “tie trade, loans, and other assistance to the use of essentially their stablecoin.”
While the United States is unlikely to follow China’s lead, some argue that it is working to over-regulate cryptocurrency. However, when it comes to CBDCs, Haun believes the US is on the right track.
“I’m glad we’re studying CBDCs as a country, but we’ve publicly stated that we’ll keep studying it for a couple of years. I believe it is critical that policymakers and private industry in the United States collaborate.”
The executive also criticized government agencies for the aforementioned over-regulation.
“It’s not that the industry opposes regulation. It seeks clarity, but does not wish to be treated as a monolith.”
These remarks come at an interesting time, particularly in light of the SEC’s actions against Coinbase and Ripple Labs.
Is there any hope on the horizon?
Furthermore, despite the allegations leveled against him, US Federal Reserve Chairman Jerome Powell recently stated,
“There is no intention of prohibiting them, but, you know, stablecoins are like money-market funds, they are like bank deposits, but they are, to some extent, outside the regulatory perimeter. It is only natural that they be regulated.”
This statement is consistent with the initial US position, which does not follow China’s lead and prohibits the use of all cryptos. Other US Senators have taken a similar stance on the crypto-regulation narrative.